What’s new: Supermarket chain CityShop has closed all of its stores after nearly 30-years doing business in Shanghai, underscoring the struggles many brick-and-mortar retailers face with weakening consumption.
CityShop, a high-end supermarket chain, closed its final two stores last week and said it was entering liquidation, citing operational difficulties and failure of a self-rescue attempt. The company’s online store has also stopped operations.
Several suppliers of CityShop told Caixin that they have faced delayed payments since late 2022 or early 2023. Public information showed that CityShop has been sued in 27 cases related to contract disputes.
In a notice CityShop pledged to resolve its outstanding debts through legal measures and protect creditors’ interests.
The context: Established in 1999, CityShop was among the first to introduce imported food and target high-end customers in Shanghai. In 2017, it sold part of its equity stake to local fresh fruit retailer FruitDay and in the next year received investment from e-commerce giant JD.com.
CityShop operated dozens of stores across Shanghai at its peak but reduced its outlets to only three in recent years.
The closure of CityShop reflects broader headwinds facing high-end supermarkets as China’s slowing economy forces many consumers to cut back. Traditional brick-and-mortar stores are also squeezed by changes in consumer behavior and competition from e-commerce, exacerbated by the pandemic.
In the first three quarters of 2023, retail sales at China’s supermarkets decreased by 0.4% year-on-year even though nationwide retail sales of consumer goods increased by 6.8%, according to data from the National Bureau of Statistics.
Contact reporter Han Wei (weihan@caixin.com)
